Tech companies navigate the Covid pandemic crisis with record revenues and profits

By Emmanuel Legrand

Here are some of the highlights of the recent financial results released by key tech players.

Alphabet
Google's parent company posted profits up 162% in the first quarter of the year compared to the same period a year ago, with revenues up 34% to a record $55.3 billion, of which advertising revenues accounted for $44.68bn. One of the key drivers of growth was YouTube, as watching videos on the platform picked up during the pandemic. YouTube's revenue for the quarter were up 49% from the same period a year ago, at $6.01bn. CNBC forecasts that at the current growth rate, YouTube will book between $29bn and $30bn in revenue this year. According to a recent Pewreport, the video platform saw usage grow from 73% of US adults in 2019 to 81% in 2021.

Amazon
Amazon's Q1 profits more than tripled to $8.1bn, while revenues exceeded $100bn for the second straight quarter. SeekingAlpha noted that almost half of Amazon's operating income came from the company's cloud services division AWS. More than 175 million Prime members have streamed TV shows and movies in the past year, according to Founder and CEO Jeff Bezos. Prime Video's streaming hours were up over 70% on the year. In 2020, Amazon spent $11bn on content, from TV series, films and music.

Apple
Apple revenues for the second quarter of its fiscal year rose to $89.6bn, up 54% year-on-year, boosted by hardware sales (in particular the iPhone 12, new Macs and the iPadPro). Apple's services division – which includes Apple TV+, Apple Music, the App  Store, iCloud and other software sales and is now Apple's second largest division – posted revenues of $16.9bn, up from $13.3bn a year ago. The company now claims to have "more than 660 million paid subscriptions" to its video, music, news and games services units, adding 40 million net paid subscriptions in the quarter.

Facebook
Revenues at the social network were up 48% to $26.2bn in the first quarter of the year, with net income up 94% year-on-year to $9.5bn. "We had a strong quarter as we helped people stay connected and businesses grow," said CEO Mark Zuckerberg. 

Netflix
Revenue for Q1 2021 grew 24% year-over-year to $7.16bn, while operating profit and margin reached all-time highs. After years of impressive growth in the US, Netflix announced that it anticipates its subscribers' base in the US to remain “roughly flat” in the second quarter of the year. The news came as the video streaming leader revealed that its subscribers' base had reached 74 million subscribers in the US and Canada during the first quarter. Overall, Netflix counts 207.6 million subscribers worldwide, a 13% y-o-y growth.
  During a call with analysts, Netflix co-founder Reed Hastings admitted that the company was “a little bit wobbly right now.” 

  In a letter to shareholders, the company wrote: "We believe paid membership growth slowed due to the big Covid-19 pull forward in 2020 and a lighter content slate in the first half of this year, due to Covid-19 production delays. We continue to anticipate a strong second half with the return of new seasons of some of our biggest hits and an exciting film lineup. In the short-term, there is some uncertainty from Covid-19; in the long-term, the rise of streaming to replace linear TV around the world is the clear trend in entertainment."